MeriStar Announces Over-Allotment Closing

17th Oct 2003

MeriStar Hospitality Corporation (NYSE: MHX), one of the nation`s largest hotel real estate investment trusts (REIT), today announced the closing of its public offering of an additional 1.8 million shares of common stock pursuant to an over-allotment option granted to the company`s underwriters in connection with its earlier offering of 12.0 million shares of its common stock, which closed on September 29, 2003. Lehman Brothers acted as the book-running manager, and Citigroup was co-manager for this transaction.
Including the over-allotment, the company sold 13.8 million shares of common stock at a price to the public of $7.20 per share pursuant to its effective shelf registration statement filed under the Securities Act of 1933. Total proceeds to the company, net of underwriting discounts and commissions, were $95.4 million. Proceeds will be used primarily to acquire hotels. To the extent that proceeds are not used to acquire hotels, they will be used for general corporate purposes.
Arlington, Va.-based MeriStar Hospitality Corporation owns 100 principally upscale, full-service hotels in major markets and resort locations with 26,219 rooms in 25 states, the District of Columbia and Canada. The company owns hotels under such internationally known brands as Hilton, Sheraton, Marriott, Westin, Doubletree and Radisson. For more information about MeriStar Hospitality Corporation, visit the company`s Web site: www.meristar.com.
This press release contains forward-looking statements about MeriStar Hospitality Corporation, including those statements regarding future operating results, the timing and composition of revenues and expected proceeds from asset sales, among others. Except for historical information, the matters discussed in this press release are forward-looking statements that are subject to certain risks and uncertainties that could cause the actual results to differ materially, including the following: the current slowdown of the national economy; economic conditions generally and the real estate market specifically; the impact of the September 11, 2001 terrorist attacks and actual or threatened future terrorist incidents; the threatened or actual outbreak of hostilities and international political instability; governmental actions; legislative/regulatory changes, including changes to laws governing the taxation of REITs; level of proceeds from asset sales; cash available for capital expenditures; availability of capital; ability to refinance debt; rising interest rates; rising insurance premiums; competition; supply and demand for hotel rooms in our current and proposed market areas, including the existing and continuing weakness in business travel and lower-than expected daily room rates; other factors that may influence the travel industry, including health, safety and economic factors; and changes in general accounting principles, policies and guidelines applicable to REITs. Additional risks are discussed in the company`s filings with the Securities and Exchange Commission, including the company`s annual report on Form 10-K for the year ended December 31, 2002. Although the company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. These statements are made as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.